He wasn't always a real-estate guru. First he owned a currency exchange. He also operated a coke ring on the side, shipping hundreds of pounds of the white stuff from Miami to Cleveland.
Then Leonard Brooks went to prison. When he got out seven years later, he took up a whole new game. There would be no nine-to-five work, changing pesos into pennies. Nor would he have to worry about the feds. The new racket was much better: inner-city real estate.
Over the next seven years, Brooks would perfect the art of buying low and selling high. It's the stuff of late-night infomercials, but Brooks added a twist: He would promise to pay for the houses, then disappear when the bills came due. Or he'd find an appraiser willing to value a home at an artificially high price, then sell to a pal willing to default on the mortgage.
The business became a family affair. Brooks's wife, mother, brother, and four kids -- each shows up in court records and property deeds.
Collectively, they're accused of stiffing four families out of their homes, according to court files. They've been party to at least eight mortgage defaults. They've bought nearly two dozen properties cheap, then resold them -- sometimes in days, sometimes in months -- for huge profits, despite no evidence of improvements to justify the markup.
They've made hundreds of thousands of dollars. And by every account, they've gotten away with it all.
Clearly, Brooks is a man with wisdom to impart. But since he isn't responding to interview requests, his actions will have to provide the instruction.
Lesson 1:
Play dirty
Sheila Ferguson might never have met the Brooks family, if not for her uncle's heart attack.
Chester Tucker, 86, had lived in his East Side home for four decades. He paid off his mortgage years ago. So Ferguson, who was watching the house while Tucker was in the hospital, thought it odd when a flurry of mail began arriving at her uncle's door addressed to Leslie Brooks.
Ferguson had never heard of Brooks, and she thought her uncle's response to her questions was strangely "hazy." After noticing that Brooks's mail included documents from a mortgage company called the Associates, Ferguson grew suspicious enough to order a title search on the home.
She was stunned: Tucker had signed the deed to his home over to a Ms. Leslie Brooks one month before. County records indicated that Brooks had paid Tucker just $6,000, though the house was valued at nearly $70,000. Three days later, Brooks had taken out a $39,000 loan with the Associates, using the home as collateral.
Ferguson confronted her uncle, who admitted what he'd been too ashamed to tell her before. Leonard Brooks had knocked on his door, ostensibly seeking work as a contractor. Brooks befriended the old man, offered to do some roofing, and helped him square away his delinquent property taxes. Tucker, partially deaf and ailing, appreciated the help.
Then Brooks got Tucker to sign a quitclaim deed, giving his home to Brooks's daughter Leslie. It's not clear how it happened. Ferguson believes Tucker's signature was forged. (The Brookses deny the claim, according to court records. They have never been charged for it.)
Even if Tucker did sign it, Ferguson claims, he couldn't have known what he was signing. After all, he had never met Leslie Brooks. He had no intention of leaving his home. And he insisted that Leonard Brooks had never given him a cent.
Regardless, once the simple two-page document was filed with the county recorder, the property became Leslie Brooks's. Cleveland Police said there was nothing they could do, Ferguson says. Eighty-six year-old Chester Tucker would have to move out.
But Ferguson decided to fight back. She and her husband Ken moved in. "I've always believed possession is nine-tenths of the law," Ferguson says. Then she called the city's office on aging, the state attorney general, the county prosecutor -- anyone she could think of.
Everyone made vague promises to help, but to no avail. Cleveland Police Lieutenant Anthony Stokes, who runs the department's financial crimes unit, says police usually stick to forgeries. Otherwise, the dispute is a civil matter -- with one exception: "If there's a pattern of the same people doing this, then we know something's not right," he says. "That's a totally different story."
At that point, there was no pattern -- at least not one the cops were aware of. Nor did a mediation hearing with the city prosecutor help. Brooks insisted he'd taken Tucker to the bank and deposited $6,000 in cash for the property, though he could produce no evidence. There was also no record of a deposit in Tucker's account, Ferguson says; a receipt Brooks later offered in court listed a $200 cash payment.
Brooks said he bought the home as a gift for his daughter. And while the prosecutors said it sounded like fraud, Ferguson says, they never took action.
Paul Soucie, the county prosecutor's economic crimes unit chief, says that, without a forgery, such cases fall into a gray area. "It's a question of how misled you actually are."
With no one willing to intervene, the Brookses tried to evict Ferguson and Tucker. They also sued in Common Pleas Court, claiming Tucker had welshed on the deal. Then, when the Associates filed for foreclosure, claiming Leslie Brooks had defaulted on her loan within its first year, the Brookses blamed it all on Tucker for not moving out.
For four years, Ferguson fought for Tucker's right to stay. In the end, she won, but it cost her $30,000 -- the Associates' price to relinquish its hold on the house. The Brooks family had already spent the $39,000 loan; if Tucker wanted his home back, he had to pay up.
"Having that home meant everything to him," Ferguson says. But that didn't make the payout any easier. "It hurt like a big dog. It still hurts. That was my entire savings."
The Brookses, meanwhile, escaped without penalty. "They got off scot free," says Ken Ferguson. "They just walked away from it."
Lesson 2:
Lie low
The Leonard Brooks listed in the phone book isn't the Leonard Brooks. The woman at that number says she was married to a Leonard Brooks, but he's dead. And he isn't the Leonard Brooks everyone seems to be looking for.
She is, however, tired of people asking. "I have received numerous calls, subpoenas, court papers from people trying to find him."
Then she hangs up.
The Leonard Brooks is something of a legend on the near East Side. When the Fergusons asked around, they were told he'd been a drug dealer and that he made his money speculating on property, Ken Ferguson says.
The first description is confirmed by court files; the second is a bit harder to prove. What is clear: Leonard Brooks knows how to work the system.
Lawyers have won judgments against him worth thousands of dollars. Few have managed to collect.
Bill collectors from the State of Ohio to St. Vincent Hospital have slapped him with fat liens. Few have been satisfied.
Cuyahoga County has come after him and his kids repeatedly for delinquent taxes, foreclosing more than a dozen times. But the family just keeps buying property. The county now claims they owe almost $200,000 in back taxes.
Brooks and his children have registered a number of companies with the county and state: Cleveland Pagers, City and County Roofing, Cedarview Development, Wilson Jarrot & Associates. Their activities are hard to trace; the companies rarely stay in business long.
Lawyers haven't had much luck serving Brooks with legal papers either. He owns dozens of properties, but not the Shaker Heights home where he's believed to live.
Johnny Waller was in the London Correctional Facility with Brooks and later purchased at least three properties from him. But the phone number Waller once used to contact Brooks has been disconnected. Numbers provided by other sources have either been disconnected or are equipped with vague answering machine messages that yield no return calls.
Deborah Papushak, the attorney who's handled most of Brooks's cases and notarized a few of his real estate transactions, was of no more help. "I'll try to find him," she said. She never called back.
This is Brooks's look: He's a big man with a big afro. Cleveland magazine once described him as "an overweight currency exchange operator with a bad heart and a habit of hiding girlfriends on the payroll."
This is his life: He is 49 years old. He and his wife have been married 27 years. Friends say they are devout Jehovah's Witnesses.
For a while, he owned a currency exchange on St. Clair. Court records show he was jailed for forgery before a bigger bust: In 1985, he was charged with being the Cleveland point man for a Miami-based drug lord, moving some 220 pounds of cocaine through the area in two years.
Brooks faced 50 years, but he copped a plea in 1987 and served only seven, according to court records.
After his release, Brooks turned to real estate. By the time he met Chester Tucker in the fall of 1997, he and his son, Leonard Jr., had already purchased nearly two dozen properties on the cheap, according to county records.
Both Brookses were familiar figures at forfeiture sales, where the county sells property lost to tax foreclosures, says Ron Young, who supervises the sales. "After a while," Young says, "you get to know the players."
But Brooks can be hard to find when he doesn't want to be found. Cleveland attorney David Holland spent months looking.
In late 1998, Brooks approached Holland's client, Jeannette Butler, offering to buy a rental property she'd owned for years, Holland says. Brooks's price -- $25,000 -- seemed reasonable, and he was offering $3,000 down, Holland says.
Butler signed a quitclaim deed, granting the property to Waller, as Brooks had requested. She expected to get the rest of the sale price in monthly payments. Instead, Brooks disappeared, Holland says.
So Butler sued Brooks and Waller. Waller showed up in court, where he vigorously asserted his naïveté. He didn't know Brooks was shady, he said. He'd paid what he promised.
But even that claim proved a bit murky. Under oath, Waller testified at various points that he'd paid Brooks $21,000, then $33,000, then $45,000, each time in cash. In the deed filed with the county, Brooks set the amount at $14,000. The "receipt" Waller provided in court said $33,000.
Brooks didn't bother to respond to the suit, much less show up in court.
But, as Waller would testify, Brooks was monitoring the case. When Holland asked Waller when he'd last seen Brooks, Waller said Brooks was in the hallway at the Justice Center during a pre-trial hearing the month before.
Holland was incredulous. "The Leonard Brooks that you bought this property from . . . was at the Justice Center last week on June 26 -- is that correct?"
Yes, Waller said.
In the end, Butler dropped her claims against Waller. Common Pleas Judge Lillian Greene then granted Butler default judgment against Brooks.
It was a moral victory at best. Waller still owns the house. Brooks still has his $21,000, or $33,000, or $45,000, or whatever Waller actually paid him. Butler is left with a judgment saying Brooks owes her $22,000.
She's held that piece of paper for eight months. During that time, the sum has grown to $23,281, thanks to interest. Holland thinks it will just keep growing.
Lesson 3:
Take the easy road
There are two ways to make money off aging urban neighborhoods.
The first involves hard work. Buy property cheaply, rehab it, then find someone willing to pay for the new and improved structure.
But for those who are too lazy or too clever to waste time with hammer and saw, there's the art of the flip, says Kermit Lind, a professor at the Cleveland-Marshall College of Law.
It works like this: Buy a property that's in terrible shape, perhaps even condemned. Slap on a fresh coat of paint and trim the hedges. Then find a dupe who will buy it at an inflated price.
Better yet, don't even bother with the dupe. Find a friend. Then find an appraiser to admire the new paint and overlook the hole in the roof. Arrange for the friend to get a mortgage on the property for far more than it's worth.
You get the cash for the sale. Your friend defaults on the loan, and you kick him a few bucks for playing the patsy.
Everyone's happy.
Except the neighbors. They have to deal with homes that are boarded up for years while the property winds its way through the court system. "These neighborhoods are being devastated by this," says Lind, who is part of the city's task force on flipping.
Ohio's Organized Crime Commission put police on alert for the practice as early as 1999. HUD, frustrated by flipping's effect on inner-city neighborhoods, now bars properties from FHA financing if the purchase comes within six months of its last sale.
Bill Edwards, spokesman for the U.S. Attorney's Office, says the FBI is actively chasing flippers, with several cases under investigation and others pending in court. And prosecutor Soucie says his office tackles about a dozen such cases every year.
But no one seems to have examined the Brooks family's transactions. From 1995 to the present, family members have purchased at least 55 properties. In about a dozen cases, they've lost the property to foreclosure or back taxes before they could find willing buyers.
The others -- more than 30 properties -- have been sold at a profit. Sometimes a big profit. Sometimes very quickly.
In February 2000, for example, Lisa Brooks bought a house on East 94th Street for $23,000.
Two weeks later, she sold it for $74,000 -- although the county had appraised it at just $23,800.
In June 2001, Leonard Brooks's company, Cedarview Development, purchased a house on East 85th Street for $28,000. It sold the same house four months later for $80,000. The city shows no record of work being done on the house; the county appraised it at just $27,914.
The story repeats itself again and again. The only differences are the addresses and the numbers. And while dollar amounts change with each deal, they always go up -- always in Brooks's favor. At the same time, city records show little evidence of any work being done on the properties, beyond the occasional board-up job.
Michael Moore knows Brooks; their kids went to the Shaker Heights schools together. He has a small business rehabbing homes, and he's bought three from the Brooks family.
Moore says he trusts Brooks. "It can be hard to find properties to rehab," he says. "I've always found [Brooks] to be fair and reasonable."
In January 2000, Lisa Brooks bought a house on Cromwell Drive for $27,900. Moore bought it the next day for $41,300.
Moore, like several people who've purchased from Lisa, says he dealt solely with Leonard. He seemed surprised to hear about the markup. "That's kind of surprising to me, because I would say he's a fair and reasonable type of person. I guess even if he did make good money, it surprises me a little bit. But I can't hold that against him. It's a democratic society."
City records show no work being done on the house. But Moore managed to sell it seven months later for $83,700. The buyer obtained a mortgage covering the full cost -- though the county still has it appraised at $46,000.
Moore insists he did rehab work. And Brooks is not a property flipper, he says. "I seriously doubt I'd classify him as that," he says. "He's an honest man, a very religious man. I would vouch for him any day."
Does Brooks do any work on his houses to justify the higher purchase price? Moore isn't sure. "He probably does do some," he says. "How much, I don't know."
Lesson 4:
If you can't find a dupe, a family member will do
In February 2000, a young woman named Tashara Brooks bought a 91-year-old duplex on Lancelot Avenue, just off St. Clair near the East Cleveland border. The price: $75,000.
There was just one problem: The person selling to Tashara was her cousin, Leonard Brooks's daughter Lisa. Lisa had bought the house just six weeks before, for $1,500, according to county records.
Tashara, curiously, had no qualms about the $73,500 markup. She took out a $56,250 mortgage and financed the rest through a loan from Lisa, according to county records.
Within a year, she stopped paying on the mortgage. The bank filed for foreclosure; Tashara Brooks never even responded to its complaint.
In February 2002, the judge ordered the house sold at a sheriff's sale. The county appraised it at just $29,200. Records show that few homes on the street have sold for even that much.
Lisa Brooks's profit on the deal: a tidy $54,750.
When reached at her home on East 91st Street, Tashara Brooks said she knew her cousin had purchased the property for peanuts just months before. Then she hesitated. "I didn't know you were doing a story on me," she said. "I don't know what good it would do to talk to you about this." She promised to pass on a message to Lisa, then hung up. Lisa Brooks failed to call.
That deal was Tashara Brooks's only venture into real estate, but it wasn't unique to the Brooks family.
Members of the family have defaulted on six mortgages since 1998, according to court records. Most of the deals involve mortgages much higher than the county's appraisal. Many of the homes were sold to them by family and friends.
Prosecutor Soucie says such deals are the hallmark of illegal flips. "It's legal to buy houses and sell them at a profit," he says. "What goes wrong is when you have deals that aren't at arm's length, when the appraiser isn't doing what they're supposed to do, if you're getting loans for way more than the property is worth."
Paul Bellamy, executive director of the Lorain County Reinvestment Coalition, says the mortgage system is ripe for fleecing. "There's so much slack built into it. Lenders and brokers have been willing to overlook the shadiest stuff, because they're still able to make money."
Brokers, after all, are mainly interested in generating commissions. So they hire appraisers willing to certify that a home is worth the sales price, even when that price seems inflated by any reasonable standard. "To hear some appraisers tell it, the only way they can stay in business is to give the lenders the number they want," Bellamy says.
In the end, the broker gets paid. The appraiser gets paid. The seller gets overpaid. And while the lenders are left holding the bag, they're so far removed from the deals, they have no idea who hit them.
Lenders buy and sell mortgages like commodities, Lind says, without tracking their source. They don't know if defaults share the same buyer, the same seller, or even the same brokers.
Back when banks handled nearly all mortgages, such defaults would have been unacceptable. But the mortgage lenders making deals today are less concerned with the details, Lind says.
"The banks would be horrified, but to these guys, it's a cost of doing business," he says.
In April 1999, Leonard Brooks Jr. bought a house on East 83rd Street for $8,500. The house was no prize; the county auditor had appraised it at just $10,800.
Nine months later, he sold it to a woman named Kandice Levert for $60,000. Levert took out a $36,000 mortgage, according to records, as well as a loan from Brooks. Later that year, Levert took out a second mortgage for $57,000 and paid off her previous loan, according to records.
Within nine months, the bank claimed that Levert had stopped making payments and filed for foreclosure.
The catch: Levert and Brooks were married in September 1999, according to county records. His profit on his wife's default: $30,500.
Leonard Brooks Jr. is best known locally as the manager for R&B singer Gerald Levert, whose two most recent albums both reached the Top 10 on the Billboard chart. (Levert, Kandice's brother, is the son of Eddie Levert of the O'Jays.)
But if Brooks Jr.'s music career is hot, his real estate deals are smoking. In March 1998, Brooks Jr. bought a house in East Cleveland for $8,000. The city issued a list of housing violations, from a decayed roof to broken windows, but saw no improvements during his ownership, according to city records.
Nonetheless, Brooks Jr. sold the house one year later for $73,500 -- twice what the county said it was worth.
The woman who bought the property, Ernestine Rufus, took out two loans to pay for the property: one from Brooks Jr. for $18,000, the rest from a mortgage company. She stopped making payments on the bank loan six months later, according to court records. By the time the bank filed for foreclosure two years later, she had died.
Strangely enough, Rufus had a previous connection to the Brooks family: She and her sister Brenda were Leonard Brooks Sr.'s underlings in his coke-dealing days, according to court records.
Brooks Jr.'s profit: $44,000.
Then there's the series of deals Brooks Jr. made on a house on East 143rd Street. The Brooks family had owned the home for years when Leonard sold it to a woman named Ronna Lavon Brown in 1997. Brown's purchase price: $8,500.
Six months later, however, Brown sold it back to Brooks Jr. -- at a $40,000 markup. Brooks Jr. got a $40,950 mortgage and promptly defaulted.
Brown, meanwhile, soon purchased a home on East 147th Street. She sold it one month later at a $40,000 markup. The buyer was Ernestine Rufus's sister, Brenda.
Rufus's mortgage ended in a $49,000 default.
The mortgages obtained by the Brooks family and their friends share many of the same witnesses and notaries. It's unclear whether they used the same appraiser or broker; neither is disclosed in county records.
Lesson 5:
It's a hardball game
The Brookses have proved remarkably adept at escaping repercussions for their deals.
The Cuyahoga County foreclosure department, which handles 10,000 cases each year, doesn't have time to notice patterns of default. The city's task force has formed several proposals for monitoring such deals, Lind says, including one requiring the names of brokers and appraisers to be disclosed for each transaction -- as well as any past code violations on the property.
The county has balked at the requirement, but city council may approve it anyway later this month, says Community Development Director Linda Hudecek. Still, the group has come to the reluctant conclusion that big policy changes would have to come from the feds, Lind says. Cities just don't have the power.
So the Brookses continue to prosper. Even the claims against them that seem most open-and-shut have difficulty winning in court. The Brookses rarely use complicated contracts, just quitclaim deeds with a few simple lines promising payments.
Sophisticated sellers insist on terms that keep the home as collateral until a full payment is received. But the Brookses know how to stack the deck. Also, many of their buyers are real estate novices who don't think to contact a lawyer -- until it's too late.
Take Louis and Sharline Laisure. The couple owns a bar, the Master Plan. "We're honest people," says Louis, a big man with the friendliness of someone used to chatting up strangers. "We didn't want no shaky deals."
Leonard Brooks had other plans. One day, he showed up at the Master Plan and said he wanted to buy another property they owned, a restaurant on Kinsman.
Sharline had inherited the restaurant years before; the couple ran it awhile, then leased it out. They didn't have long-term plans for the property. Also, Brooks "had the gift of gab," Sharline says. He managed to dicker them down to a $45,000 purchase price, with $5,000 cash thrown in for the restaurant's equipment.
The Laisures owed the government back taxes on the property, so they set up an agreement that would obligate Brooks to make monthly payments directly to their tax debt, Louis says. Then the couple signed over the property to Brooks's wife, Loretta.
They never heard from either Brooks again. They did hear from the government, however. It wanted to know why they'd stopped paying off their tax bill.
The couple was shocked. "The Brookses seemed like the nicest people in the world," Louis says.
Even more shocking was what happened in court. The Laisures' attorney, Cynthia Smith, failed to file a motion on time, according to court files. Brooks's lawyer asked the magistrate to throw the case out.
And that was that. Although Smith later claimed in court files that she'd been in a car accident, the decision was final.
Smith did not return repeated calls for comment. The Laisures say they plan to appeal.
Lesson 6:
When all else fails, play poor
Reginald Groves won a $42,000 judgment against Lewis Brooks and his mother, Melberta. He says it wasn't worth his while.
Lewis Brooks, who is Leonard's younger brother, had purchased a home from Groves on East 106th. He paid $3,000 cash and promised another $42,000 in monthly payments, Groves says.
So when Lewis Brooks disappeared after a single payment and the phone numbers he'd provided were disconnected, Groves filed suit -- and won. Neither Brooks fought it.
In a phone interview, Lewis Brooks told Scene that his deals "are just bad management" on his part. Then he cut short the conversation and promised to call back. He never did.
But when the city razed the house for code violations, Groves got stuck with the demolition bill. Never mind that Lewis Brooks owned the property. "I was so angry I couldn't see straight," Groves says.
That, however, would not be the end. Last summer, a man identifying himself as Leonard Brooks called Groves, pleading that the whole mess was his brother's fault, Groves says. Leonard asked Groves to release his "down-and-out" mother from the judgment. She was elderly and needed central air, but she couldn't get the work done without his forgiveness. When Groves refused, Leonard Brooks offered $2,000 -- "all he could scrape up," Groves recalls.
Groves said no. "I said I'd walk away from the whole thing for $25,000," he says. "But I wasn't going to release the only leverage I had for two grand."
It's hard to blame him. Three months after Groves won his court case, Melberta Brooks sold a house she'd bought four months before. Her profit, according to county records: $49,000.
In the next year, Leonard Brooks's new company, Cedarview Development, would purchase six properties and quickly resell them, one in as little as four days. Combined profits for the six sales: $151,000.
Reginald Groves has yet to see a penny.
